Discussion Paper Details

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Title: Imports, Entry and Competition Law as Market Disciplines

Author(s): Bernard Hoekman and Hiau Looi Kee

Publication Date: February 2003

Keyword(s): competition law, domestic entry, import penetration and industry markup

Programme Area(s): International Trade and Regional Economics

Abstract: Since the early 1990s, numerous countries have adopted or strengthened competition legislation. In this Paper we investigate the impact of competition law on industry markups over time and across a large number of countries. We find both domestic and foreign competition to be major sources of market discipline in concentrated markets, but that the direct effect of competition law is insignificant. Once allowance is made for the endogeneity of both domestic competition (number of firms) and the adoption of a competition law, however, we find that competition laws have an indirect effect on equilibrium markups by promoting a larger number of domestic firms.

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Bibliographic Reference

Hoekman, B and Kee, H. 2003. 'Imports, Entry and Competition Law as Market Disciplines'. London, Centre for Economic Policy Research.